Tencent is in talks with potential co-investors about buying a minority stake in Universal Music Group (UMG) from Vivendi SA, according to people familiar with the matter. People familiar with the matter, who spoke on condition of anonymity because the information has not been made public, said Tencent had reached out to potential investors, including Hillhouse Capital and Singapore’s sovereign wealth fund, GIC Pte.
Tencent plans to lead the acquisition of 10 per cent of UMG, with the aim of implementing the acquisition in the coming months, people familiar with the matter said.
Tencent is considering raising about 1 billion euros ($1.1 billion) in debt to help with the acquisition, with the rest likely to be financed through equity financing, according to people familiar with the matter.
Vivendi announced in August that it was selling a 10 per cent stake in UMG to Tencent, valuing the world’s largest music company at 30 billion euros. Tencent will receive a one-year oversubscription option to acquire an additional 10% of the shares at the same price and terms. Vivendi also plans to sell a minority stake in UMG to other potential partners.
People familiar with the matter said the search for minority investors could help share the cost and risk of Tencent buying up to 20 per cent of UMG. People familiar with the matter said the talks were still ongoing and could break down, so no final decision had been made.
Representatives for Tencent did not respond to requests for comment, and representatives of Hillhouse Capital, GIC and Vivendi declined to comment.